India has strong case to show how US is using climate change to promote its companies: CSE

According to reports, the Centre for Science and Environment (CSE) has termed the US charges that India’s National Solar Mission is discriminating against foreign companies as ‘hogwash’.

The US has filed a challenge in the World Trade Organisation (WTO) against India’s National Solar Mission — the charge is that the mission discriminates against foreign solar companies.

The US lawmakers have used phrases such as “India isn’t playing by the rules” to support this action. The assertion is far from the truth, said CSE.

“The US is worried and is trying to browbeat India. India should not be cowed down. It has a very strong case to show to the world how the US has been using climate change to further the interests of its companies. The US is the one dumping cheap solar panels, not India,” it said.

Since the beginning of the National Solar Mission, which aims to make solar power affordable through its increased use and manufacturing, the US has used the loopholes in the mission as well as climate finance to the advantage of its manufacturers, CSE said.

These manufacturers have gone on to sell highly subsidised solar panels to India. This, in turn, has made Indian solar manufacturing companies uncompetitive, CSE said.

Currently, an estimated 80 per cent of the Indian manufacturing capacity is in a state of forced closure and debt restructuring with no orders coming to it, while American manufacturers are getting orders from Indian solar power developers.

The US has been able to do so by using the climate ‘fast start financing’ to its pervert advantage, CSE pointed it. Fast start financing is a $30-billion fund set up under the United Nations Framework Convention on Climate Change. The fund, adopted at the Copenhagen climate meeting in 2009, was supposed to help developing countries deal with climate change impacts and limit greenhouse gas emissions.

The US has ingeniously used this fund to promote its own solar manufacturing. The US Exim Bank and the Overseas Private Investment Corporation (OPIC) have been offering low-interest loans to Indian solar project developers on the mandatory condition that they buy the equipment, solar panels and cells from US companies. This has distorted the market completely in favour of US companies, CSE pointed out.

CSE estimates that about half of all solar modules installed under the National Solar Mission have been manufactured by the US companies. In a majority of instances where US manufacturers have sold modules in India, they have been able to do so because of the US Government’s financial support. Thus, the biggest winner of the Solar Mission’s largesse so far has been the US manufacturing sector, it said.

So what is worrying the US? The US is worried about two things that are currently happening in India: One, in November last year, the Directorate-General of Anti-Dumping and Allied Duties (DGAD), under the Commerce and Industry Ministry, initiated an investigation into solar cell imports from China, Malaysia, Chinese Taipei and the US. According to DGAD, there is sufficient prima facie evidence of dumping of solar cells from the four countries.

Second, in December last year, the Ministry of New and Renewable Energy came out with its draft guidelines on the second phase of the Solar Mission.

The first phase mandated domestic content requirement: all projects must buy domestically manufactured solar equipment. However, this was applicable only to crystalline photovoltaic technology and not thin-film photovoltaic technology. The US companies had used this loophole to export subsidised thin-film PV modules to India.

Under the second phase, there is a demand from manufacturers as well as many think-tanks to make domestic content requirement also applicable to thin-film technology. If this happens, it will put a stop to the import of subsidised solar modules from the US.